New Year's Message from JAMA

On behalf of all of JAMA’s members, I wish everyone a happy, prosperous and fulfilling 2013.

As we enter the second new year since the unprecedented devastation caused by the March 11, 2011 earthquake and tsunami, we are all too keenly aware that numerous victims of that calamity continue to reside in temporary housing. Taking that reality to heart, my first hope for 2013 is that this be a year of redoubled efforts to advance post-disaster reconstruction and recovery.

The global automobile market over the past year was distinguished, first of all, by a major slump in Europe under the impact of the eurozone debt crisis. On the other hand, emerging markets—notably those of China and other Asian nations—recorded positive growth. And with the United States market having rebounded to the 14-million-unit level, I believe 2012 will be remembered as a year that marked a return to generally solid growth in the worldwide auto market.

In the new year there are, to be sure, numerous risks of downswing, but from a global perspective the auto market remains a growth sector, which also means that international competition is bound to intensify.

Turning to Japan’s domestic market in 2012, purchasing subsidies helped new vehicle sales recover to over five million units. But under the impact of sustained, excessive yen appreciation, Japanese exports have lost their competitive edge. Despite some monetary easing measures implemented by the Japanese government and the Bank of Japan, no significant progress has been made in reversing the Japanese economy’s 15-year-long deflationary trend.

Yet, although Japan clearly remains bogged down by a sense of economic malaise, I have come to believe that the cumulative effects of such ordeals as the 2008 global financial crisis and the disasters of March 11, 2011 triggered a basic change in the Japanese people—namely, an inclination to rediscover past values that had gradually faded in contemporary society. Underscoring this perception are the affirmations that we have entered an era more strongly defined by “the heart,” or the bonds that connect people with each other. This, I believe, is evidence that the Japanese are now actively reexamining the intrinsic importance of values that cannot be measured in terms of monetary worth.

Similarly, regarding industry and business enterprise, there has been a shift away from focusing on the generation of short-term profit. Instead, greater emphasis is being placed on collective advancement, hand in hand with all stakeholders—customers, business partners, local communities, and indeed the nation as a whole. In the manufacturing sector in particular, it has never been more critical to meet the expectations of customers and of society at large through the supply of goods produced with sound craftsmanship.

Moreover, the invaluable support and understanding of all such stakeholders was crucial in enabling the Japanese automobile industry to overcome the stiff challenges it has encountered over the past few years. It is, therefore, with profound gratitude that JAMA members resolve this year to continue moving forward, not just in the interest of the auto industry but, equally, to help invigorate Japan and raise its people’s spirits. Our priority focus will be on revitalizing the domestic vehicle market and improving the business environment.

Revitalizing the domestic vehicle market
Reversing the protracted stagnation of Japan’s vehicle market requires, as a first step, the supply of products that genuinely appeal to consumers. Accordingly, our industry is adopting new strategies to attract interest in its products from a broad range of potential customers.

One example is the auto industry-organized Odaiba Festival-Tokyo Motor Week 2012 event held last October, which primarily targeted young people, who in Japan today are thought to be losing interest in cars and car ownership. This event showed, however, by the throngs of smiling young adults who attended it, that efforts designed specifically to appeal to this age group can, in fact, result in heightened consumer interest in cars, motorcycles, and motor vehicle use overall.

Our current aim at JAMA is to build on such momentum as we gear up for the 43rd Tokyo Motor Show to be held this November. The show is being planned to appeal not only to long-time vehicle users but also to people less familiar with the motoring experience, and a major emphasis will be placed on providing visitors with numerous opportunities to interact directly with the latest vehicle models and the advanced technologies they incorporate.
Revitalizing Japan’s domestic market also requires creating an environment that is conducive to motor vehicle purchasing. A case in point is the need for less onerous automobile-related taxes, and therefore for fundamental changes to the automotive tax regime in its present form.

Last month’s Lower House election and resulting change of administration effectively delayed discussions on automotive tax reform until the beginning of this year. JAMA is, meanwhile, more committed than ever to its mission of lobbying, along with other industry groups, for the government’s early repeal of Japan’s automobile acquisition and tonnage taxes.

Improving the business environment
Since my appointment as JAMA chairman in May of last year, I have seized every opportunity to speak out on the necessity of sustaining Japanese manufacturing.

The fact is, however, that businesses in Japan continue to struggle in a very harsh environment, the result of various factors including the unprecedented yen appreciation referred to earlier, the higher cost of electric power, and slow progress in the conclusion of free trade-promoting economic partnership agreements. A continuation of this situation, it is feared, will defy even the most diligent competitive efforts of private enterprises, making it extremely difficult to maintain manufacturing in Japan.

Our objective at JAMA is to foster, through constructive dialogue, a thorough understanding on the government’s part of the automobile industry’s dynamic and tenacious efforts to cope with these circumstances, so as to achieve a lowering of the hurdles it faces, including those I mentioned above.

Furthermore, sound diplomatic ties with the other countries of the world are a critical underpinning to the auto industry’s increasingly global business activities. In this area as well, we look to the government for strong and enlightened leadership.

In conclusion
Society’s achievement of safe, clean and comfortable mobility is the overall mission of our industry. In pursuit of that goal, Japan’s auto manufacturers will work continuously to introduce to the marketplace top-caliber vehicles that incorporate ever more advanced safety and environmental technologies.

Last year saw changes in national leadership in a number of countries. In Japan, the new administration that took office at the end of December faces the ongoing massive task of post-earthquake reconstruction, along with an array of tough challenges including prolonged and excessive yen appreciation.

These circumstances provide the Japanese automobile industry with the opportunity to appreciate anew the aspirations of Japan’s industrial pioneers. So inspired, we in the industry will do everything we can to sustain and further nurture the country’s manufacturing heritage, confident that our efforts will contribute to a more dynamic and positive national outlook.

While we intend to work with the government to convey our views in this regard, we also hope that Japan’s new administration will demonstrate the understanding, leadership and bold initiative that are required, in terms of policy formulation and implementation, to build a society whose concerns are addressed and whose efforts are rewarded.

JAMA and its members look forward to your continued support and encouragement throughout 2013.